Market Strategist Warns of ‘Blood’ on February 1 Ahead of Fed Meeting

Stocks, precious metals, and cryptocurrencies rallied during the archetypal period of the year, and marketplace strategists are saying that markets could retract successful the adjacent aboriginal if the U.S. Federal Reserve keeps hiking rates and maintaining a broader tightening policy. In 3 days, connected Feb. 1, 2023, the Federal Open Market Committee (FOMC) is acceptable to convene. While the marketplace expects complaint cuts, immoderate analysts deliberation the Fed volition proceed raising the national funds rate. Chris Vermeulen, the laminitis and main concern serviceman of The Technical Traders, insists the S&P 500 is owed to descent 37% little than its existent position.

Strategist Predicts Potential Market Correction arsenic Powell’s Re-tightening of Financial Conditions is Anticipated

Markets are intimately watching the adjacent Federal Open Market Committee (FOMC) meeting, scheduled to hap connected Wednesday, Feb. 1, 3 days from now. Last week, Bitcoin.com News reported connected however investors are intimately pursuing the determination of Jerome Powell, the 16th president of the Federal Reserve. As the FOMC gathering approaches, discussions astir the result person been wide connected societal media.

A marketplace strategist known arsenic “The Carter” explained connected Jan. 27 that “there volition beryllium humor connected February 1,” referring to the turmoil that markets whitethorn look aft Powell addresses the nation. While immoderate investors are expecting a dovish Fed and imaginable complaint cuts, Carter argues that Powell volition alternatively proceed to tighten and instrumentality restrictive policy.

The expert notes that Powell has antecedently referred to a “broader tightening project” successful 3 stages: accelerated hikes to scope a neutral rate, measured hikes to scope a “sufficiently restrictive” complaint and staying astatine the terminal complaint for immoderate time. ‘U.S. Federal Reserve Chair Jerome Powell volition re-tighten fiscal conditions by forcefully addressing complaint cuts head-on,’ Carter stressed successful a Twitter thread.

The strategist expects that the Fed seat volition code this taxable forcefully connected Feb. 1 and displacement the speech towards however agelong the Fed needs to clasp astatine the terminal complaint and why. “Look for him to grow connected the lessons of the 1970s,” Carter wrote. “Why the marketplace continues to punch Powell successful the look and not expect a counter-punch is beyond me. This is the craziest marketplace set-up close here, close now. There volition beryllium humor connected February 1.”

Expert Predicts 37% Drop successful S&P 500, While Gold and Silver Set to Shine successful Bearish Market

Speaking with David Lin, anchor and shaper astatine Kitco News, Chris Vermeulen, laminitis and main concern serviceman of The Technical Traders, said that stocks are owed for a correction.

“I honestly deliberation that the S&P 500 could autumn different imaginable 37 percent, roughly, from existent levels,” Vermeulen told Lin. “That is capable to make a batch of damage, a batch of stress, tons of bankruptcies, you sanction it,” helium added. In contrast, Vermeulen expects golden and metallic to radiance passim the bearish market. “This is erstwhile precious metals and miners instrumentality off,” Vermeulen insisted portion discussing marketplace cycles.

Vermeulen is not the lone capitalist who believes golden and metallic are acceptable to instrumentality off. In December 2022, the manager of the AuAg ESG Gold Mining ETF, Eric Strand, said that golden volition spot a caller all-time precocious successful 2023 and cardinal banks similar the Federal Reserve volition pivot connected complaint increases.

“It is our sentiment that cardinal banks volition pivot connected their complaint hikes and go dovish during 2023, which volition ignite an explosive determination for golden for years to come,” Strand said. “We truthful judge golden volition extremity 2023 astatine slightest 20% higher, and we besides spot miners outperforming golden with a origin of two.”

While golden has been connected the emergence and 2023 expectations are high, Harry Dent, the laminitis of HS Dent Investment Management, has a contrarian view astir gold’s show this year. Dent predicts the yellowish precious metallic could suffer $900 to $1,000 implicit the adjacent 18 months.

What are your thoughts connected the imaginable marketplace correction? Do you hold with the analysts’ predictions oregon bash you person a antithetic perspective? Share your thoughts successful the comments conception below.

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